Guangzhou, formerly known as Canton, is the capital of China’s wealthiest province Guangdong and has experienced extraordinary growth over the last few decades. As the first region in China to be ‘opened up’ by Deng Xiaoping, the city has experienced double digit GDP growth over the last two decades although, like China’s economy overall, has since decreased to 8% in 2015. Despite easing growth, Guangzhou is still ranked third behind Shanghai and Beijing in terms of its GDP value and is situated just north of Hong Kong in the Pearl River Delta “PRD” region. It occupies 7,435 square kilometres of land and houses a population of over 13 million. Guangdong Province is currently China’s largest provincial economy (surpassing a GDP of $1 trillion in 2013), and ranks among the world’s 15 largest economies.
A region of wealth
The PRD region on China’s south-east coast encompasses the neighbouring cities of Guangzhou, Shenzhen, Foshan, Zhuhai, Huizhou, Dongguan, Zhongshan, Jiangmen and Zhaoqing and the Special Administrative Regions Macau and Hong Kong. The PRD is one of China’s leading economic regions and, according to Hong Kong Government data, in 2013 experienced GDP growth of 9.4% and accounted for approximately 10% of China’s overall GDP. The region’s merchandise trade reached a staggering US$1,778.2 billion in 2012, nearly US$95 billion more than that of Japan’s international trade volume. In international standings, this places the PRD region fourth in terms of trade, just behind the US, Germany and Hong Kong. A recent study conducted by the World Bank found that the PRD region is now equivalent to the world’s largest “megacity” in terms of land size and population.
The PRD region also houses the new Guangdong Free Trade Zone (FTZ) district which includes Nansha in Guangzhou, Hengqin New Area in Zhuhai and the Qianhai and Shekou areas in Shenzhen. The Guangdong FTZ aims to boost trade and investment across advanced manufacturing, financial services, logistics, information technology and tourism. The FTZ also aims to enhance the region’s cooperation with Hong Kong and Macau, transforming this region from a manufacturing centre to a sophisticated high-end services hub. The special provisions governing the FTZ, particularly the Nansha region, aim to make it an attractive location for international financial institutions. This represents a significant opportunity for Australian companies to export their strong financial services capabilities to Guangzhou and profit from the vast amount of wealth and activity in the PRD region.
In just 15 years Guangzhou has emerged as a glittering cosmopolitan city, housing sky scrapers rivalling those of Shanghai and streets lined with luxury global brands and restaurants. With such large scale economic growth and development, it is not surprising that the per capita consumption expenditure of Guangzhou’s urban households is 183% of the national average. Also, in 2013, Guangzhou’s consumer retail sales stood at RMB688.3 billion.
Guangzhou is also home to several of China’s largest companies and wealthiest individuals including R&F Properties, owned by Zhang Li who is one of China’s richest individuals, Evergrande and China Southern Airlines. In 2013, Guangzhou reportedly had approximately 45,900 individuals with assets of RMB10 million or more. The number of private enterprises in Guangdong mushroomed to 1.53 million in 2013, up from 258,620 in 2002. According to Hong Kong government data, exports by Guangdong’s private enterprises skyrocketed from US$4.1 billion to US$213 billion from 2000 to 2013. Growing affluence in the region has fuelled demand for better education services and families and students are looking overseas to Australian education providers. Currently, students from Guangzhou represent a significant portion of the total number of Chinese international students in Australia. Anecdotal evidence suggests that parents of Chinese international students in Australia spend money on apartments, tourism and in some cases, even start investing in Australian businesses; presenting a new market segment for Australia.
Originally a manufacturing hub, Guangzhou has reinvented itself to be the country’s engine of innovation and new technologies. The Municipal Government has been working hard to propel Guangzhou up the global value supply chain – promoting its aim to move away from products ‘Made in Guangzhou’ to ‘Created in Guangzhou’. The country’s National Development and Reform Commission approved Guangzhou as a national high-tech industry base which has been incorporated into the city’s 12th Five-Year Plan (2010-2015). Under the Plan, the Municipal Government has set aside one billion yuan each year to fund and support enterprises and projects that develop Guangzhou’s high-tech industry, possessing intellectual property rights of core technologies and featuring highly recognisable brands. Under the Plan, the city has identified six new emerging industries for development. These include: new-generation information technology, bio engineering technology, new materials, new energy vehicles, new energy and environmental protection and marine engineering. By 2020, Guangzhou aims to increase the output value of high-tech products to RMB2 trillion. With increased expenditure in Guangzhou’s environmental protection policies, trade in green and new energy technology products and research represent an opportunity for strong Australian-Chinese collaboration.
In 2014, eight Guangzhou-based companies were listed among China’s top 50 most innovative companies by US business magazine ‘Fast Company’. One such company, Guangzhou Ehang Intelligent Technology, has created the first smartphone app-operated intelligent robot that can be used for geographical surveying, aerial filming, surveillance and even providing disaster relief. This showcases Guangzhou’s emerging population of entrepreneurs and innovative capabilities.
In 2014, New South Wales and Guangdong province celebrated the 35th anniversary of their Sister State relationship, the first of its kind to be established between an Australian state and Chinese province. NSW has the largest population of Chinese residents, and Mandarin and Cantonese are the most common languages spoken in NSW after English. To celebrate their anniversary, the Governor of Guangdong, His Excellency Mr Zhu Xiaodan, visited NSW and signed a Joint Statement with Premier Michael Baird to further their cooperation in the development of key industries such as agribusiness, smart technology and research and development. Sydney, Australia’s financial hub, is well placed to attract high levels of investment and services from one of China’s wealthiest cities, Guangzhou.